Dell Research Review
Description
Don't let the name change fool you. Despite the decision to
drop "Computer" from its name, Dell remains the world's #1
direct-sale computer vendor and competes with Hewlett-Packard for the worldwide
PC title. In addition to a full line of desktop and notebook PCs designed for
consumers, Dell offers network servers, workstations, storage systems, and
Ethernet switches for enterprise customers. The company also sells handheld
computers, and it markets third-party software and peripherals. Dell's growing
services unit provides systems integration, support, and training.
With the industry-standard Wintel platform (Microsoft Windows operating system
and Intel microprocessor) as its foundation, Dell faces intense competition
from Hewlett-Packard, whose market share increased dramatically following its
acquisition of perennial PC leader Compaq. Dell generates about 80% of its
sales from desktop and notebook PCs.
Entrepreneurial wunderkind Michael Dell pioneered the direct-sales model for
computers and took the company from his dorm room to the top of the PC heap by
keeping it focused on a simple formula: Eliminate the middleman and sell for
less. Dell's built-to-order boxes allow for lower inventories, lower costs, and
higher profit margins -- elements that leave Dell well armed for the PC price
wars and a general recession in IT spending.
Despite its success at grabbing PC market share, Dell continues to attack new
markets. It has put increasing emphasis on server computers and storage devices
for enterprises. Furthering its push beyond PCs, Dell has introduced a handheld
computer, a line of Ethernet switches, and consumer electronics such as digital
music players and LCD televisions. It also partnered with Lexmark to develop a
line of Dell-branded printers. On the services front, Dell has mirrored its
straightforward approach to hardware sales, embracing a fixed-price model for
offerings such as data migration and storage systems implementation. Dell augmented
its storage line when it reached an agreement with market leader EMC to resell
that company's enterprise systems. The company is also looking to international
revenue to supplant sales in the PC-saturated US market. Though perhaps best
known for its domestic consumer business, Dell only generates about 15% of
overall sales from that segment.
Founder and chairman Dell, who is the longest-tenured
CEO at any major
Latest News
Oct. 9, 2003--FreeMarkets, Inc. (Nasdaq:FMKT) announced that its Executive Vice President
and Chief Financial Officer Joan Hooper has resigned to join Dell Inc,
effective at the end of October. The company also announced that Sean Rollman will assume her finance responsibilities in the
interim.
Financial Numbers
Income Statement
2003 2002 2001 2000
Sales ($ mil.) 35,404.0 31,168.0 31,888.0 25,265.0
Net Income ($ mil.) 2,122.0 1,246.0 2,177.0 1,666.0
Net Profit
Margin 6.0% 4.0% 6.8% 6.6%
Earnings Per Share( $ ) 0.80 0.46 0.79 0.61
Stock Price - FY High( $ ) 31.21 31.32 59.69 55.00
Stock Price - FY Low( $ ) 21.90 16.01 16.25 31.38
Stock Price - FY Close( $ ) 23.86 27.49 26.13 38.44
P/E
High 39 68 71 90
P/E
Low 27 35 19 51
Dividends Per Share 0.00 0.00 0.00 0.00
Book Value Per
Share 1.89 1.80 2.16 2.06
Employees 39,100 34,600 40,000 36,500
Sources Cited
Copyright
2004 Hoover's Inc.,
LexisNexis(TM) Academic - Document
Standard
& Poor's Daily News
Copyright
2003 The McGraw-Hill Companies, Inc.
LexisNexis(TM) Academic - Document